Academic journal article Academy of Marketing Studies Journal

Active Adult Communities: A Development of Hypotheses regarding Consumer Attitudes and Preferences

Academic journal article Academy of Marketing Studies Journal

Active Adult Communities: A Development of Hypotheses regarding Consumer Attitudes and Preferences

Article excerpt

INTRODUCTION

As the population ages, "the single most important demographic trend in the United States is the changing age structure of the population ... The post-World War II baby boom produced 78 million baby boomers, born between 1946 and 1964" (Kotler & Armstrong, 2010, p.70). In a study conducted by the MetLife Mature Market Institute and the National Association of Home Builders, it is projected that the population of Americans 55+ will increase to 26% of the U.S. population by 2014 from 23% of the population in 2007 (MetLife, 2009, p.4). In terms of housing, the demographic trend of an aging society should drive demand for active adult housing in the context of age-qualified communities.

Many expect "the active adult retirement community (AARC) business to account for between 20 and 30 percent of all housing by the year 2020" (Becker, 2001, p.299). Active adult communities are an "antidote to negative stereotypes of older age as a period of decline in physical and social competencies" (McHugh & Larson-Keagy, 2005, p.252).

However, "marketers must be careful to guard against stereotypes when using age and lifecycle segmentation" (Kotler & Armstrong, 2010, p.194). "The simple fact that the baby boomers are aging does not guarantee that they will behave in the same way as previous generations ... Research also suggests that the market for retirement housing and long-term care is heterogeneous" (Gibler, Lumpkin & Moschis, 1997, p.119), not all aging adults will seek the same type of living arrangements. "People over age 50 are not a homogeneous demographic group and.their wants and needs differ" (Cecilian, 2001, p.119). Even boomers current views on how and where they would like to spend their retirement are not necessarily a reliable indication, "as their attitudes are likely to change as they reach retirement age" (Logan, 2001, p.38).

In this paper we seek to develop a number of hypotheses regarding age-qualified active adult communities based on a preliminary study. The areas of inquiry include: 1) Target buyer characteristics and information sources, 2) Community design preferences/amenities, 3) Location preferences, 4) Specific product features desired, and 5) Impact of economic conditions on respondents' purchase intentions.

BACKGROUND

ACTIVE ADULT COMMUNITIES

Adult age-restricted communities have been around in the United States dating back to the 1920's, when various non-profit organizations acquired property in Florida to establish sponsored supportive living environments for retiring members (Hunt et al., 1984, p.1). According to a study by the MetLife Mature Market Institute (2009, p.4) the share of Americans 55+, living in age qualified active adult communities is on the rise; those "living in adult age-restricted communities grew from 2% of all U.S. households in 2001 to 3% in 2007."

It has been proposed that housing options for the mature market can be viewed "on a continuum starting with independent living choices to assisted living to nursing facilities that provide 24 hour care" (Timmermann, 2006, p.23). More formally, based on case studies of 18 retirement communities, Hunt et al. (1984) developed a multi-dimensional typology of retirement communities. Five basic types were identified: 1) New Towns, 2) Retirement Villages, 3) Retirement Subdivisions, 4) Retirement Residences, and 5) Continuing Care Retirement Centers (Hunt et al., 1984, p.249-261). The typology is based on four major attributes: 1) Scale of the community, 2) The characteristics of the population, 3) The kinds and amounts of services offered, and 4) The sponsorship or auspices under which the community was built (Hunt et al., 1984, p.10).

"Retirement communities (i.e. active adult communities) will continue to evolve with a less single-minded focus on recreation. Retirees have made major shifts from the early days of the initial Del Webb facilities of the late 1950's and early 1960's. …

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